Evergrande's money finally knows where to go

Although Xu Jiayin went in, many people still have doubts, Evergrande's debt is as high as 2.4 trillion, where did it go with so much borrowed money?

Recently, Hong Kong bigwig Liu Luanxiong held a press conference, and he answered some questions related to Evergrande, and finally found some answers.

Evergrande's money, in addition to flowing into Boss Xu's personal pocket, was also divided by the financiers behind him, including Liu Luanxiong.

The outside world has always said that Liu Luanxiong invested in Evergrande and lost more than 10 billion, and this time the reporter also asked Liu Luanxiong if he hated Xu Jiayin. He said that he didn't blame Boss Xu (Xu Jiayin), it was normal for businessmen to make profits and losses in investment.

However, did Liu Luanxiong really lose?

Let's take a look at how much money Liu Luanxiong invested, in 2008, Evergrande encountered a crisis, Xu Jiayin went to Hong Kong to play cards, and got acquainted with Zheng Yutong, Liu Luanxiong and other bigwigs. In the end, these bigwigs invested $506 million in Evergrande, bringing Evergrande back to life. Among them, how much money Liu Luanxiong invested, the outside world does not know.

In 2009, Evergrande was successfully listed, and Liu Luanxiong was one of the investors. In 2016, Liu Luanxiong bought shares of Shengjing Bank for HK$6.9 billion.

From 2017 to 2018, Liu Luanxiong bought Evergrande shares for HK$13.569 billion, holding 6% of the shares, becoming the second largest shareholder of Evergrande.

Liu Luanxiong also subscribed to a number of bonds issued by Evergrande. At the end of 2018, it subscribed for HK$4.7 billion of Evergrande bonds, bought US$1.1 billion in 2019, and as early as 2010, bought US$750 million of Evergrande corporate bonds twice.

In 2020, Gambi spent HK$4.5 billion to subscribe for a 5.37% stake in Evergrande Property, and in early 2021, Gambi subscribed for a HK$3 billion stake in Evergrande Automobile.

After calculation, Liu Luanxiong's investment in Evergrande is expected to exceed 40 billion Hong Kong dollars. I have to say that he is really a staunch supporter of Xu Jiayin.

However, Liu Luanxiong often said: "If there is money, we will work together, and if there is difficulty, we will do it together!" that is, "if you have money, you will do it together, and you will bear it together." Xu Jiayin also gave Liu Luanxiong a rich reward.

In 2015, Evergrande spent a total of 13.5 billion Hong Kong dollars to acquire a number of Liu Luanxiong's projects in the mainland, and it is said that these lands have risen by 4 or 5 times, which means that Liu Luanxiong spent more than 3 billion Hong Kong dollars when he bought it, and he made 10 billion Hong Kong dollars when he sold it to Evergrande.

In addition, Evergrande also bought Liu Luanxiong's Vantone Building in Hong Kong for HK$12.5 billion that year, and he only spent HK$400 million when he bought it, making a net profit of HK$12 billion.

Evergrande spent HK$26 billion just to buy Liu Luanxiong's assets, allowing Liu Luanxiong to earn more than HK$20 billion.

Liu Luanxiong's purchase of Shengjing Bank should have been at a loss, and it is said that in January 2017, the floating loss on the book reached 2.366 billion Hong Kong dollars. Evergrande sold the shares of Shengjing Bank, which was also a loss sale, and we treated Liu Luanxiong as a loss of more than 2 billion Hong Kong dollars.

However, when Xu Jiayin became the richest man, he earned more than 15 billion yuan with Zhuang's Liu Luanxiong.

After Evergrande's accident in 2021, Liu Luanxiong reduced his holdings of Evergrande shares many times, resulting in losses of up to HK $10.9 billion. However, he did not calculate the amount of dividends he received after becoming the second shareholder of Evergrande.

In 2018, Evergrande paid a dividend of 18.7 billion yuan, and Liu Luanxiong received about 1.7 billion yuan. In 2019, Evergrande paid dividends of nearly HK$10 billion, and Liu Luanxiong received about HK$900 million. In 2020, Evergrande paid a dividend of HK$2.4 billion, receiving about HK$200 million again. In total, the total dividend is about HK$4.4 billion.

As for bonds, that's really a sure win. Evergrande has issued a lot of senior high-yield bonds, which are characterized by high interest rates and enjoy the right of first refusal, which means that if the company has a problem, it must repay these bonds first. However, these high-yield bonds are exclusive to Xu Jiayin, shareholders and executives, and ordinary people simply cannot buy them.

For example, in 2018, Xu Jia Printing bought two US dollar bonds of Evergrande for $1 billion, with annual interest rates as high as 13% and 13.75%, and the interest income was as high as 141 million yuan after only 2 months.

The HK$4.7 billion bond purchased by Lau Luen-hung at the end of 2018 has an annual income of about HK$500 million. The interest rate of US dollar bonds purchased in 2019 ranged from 6.25% to 8.25%, and the interest income was also very substantial.

The relatively lossary is the 7.5 billion Hong Kong dollars invested in Evergrande Property and Evergrande Automobile, because the stock prices of these two companies have already fallen miserably. In addition, Liu Luanxiong still holds 2.36% of Evergrande shares.

Therefore, calculated to the end, Liu Luanxiong's return from Evergrande is more than 45 billion Hong Kong dollars, and if you add the shares of China Evergrande, Evergrande Property and Evergrande Automobile, which have not yet cashed out, it will definitely exceed 50 billion Hong Kong dollars.

Of course, this is just an estimate, Liu Luanxiong himself said, whether it is a loss or a gain, it is necessary to calculate the general account.

The reason why Evergrande's debt is so high is because it bought a lot of assets at a high price. In order to repay the bigwigs in Hong Kong, in 2015, Evergrande spent 5.5 billion yuan to acquire Zhang Songqiao's real estate project, spent 33.9 billion Hong Kong dollars, acquired Zheng Yutong's mainland project, set a new record for the highest real estate acquisition in China, and spent 26 billion yuan to acquire Liu Luanxiong's assets.

In total, Evergrande spent a total of about HK$65.5 billion. It is really a high-priced acquisition, such as Liu Luanxiong's Hong Kong Vantone Building, 12.5 billion Hong Kong dollars has set a new historical transaction record, such a high-priced project, it is difficult to sell, and there is a lot of room for premium. But Xu Jiayin didn't blink his eyes, so he bought it boldly.

Now, these assets have fallen miserably, Evergrande wants to sell Vantone Building (later renamed Hong Kong Evergrande Center), Li Ka-shing is only willing to pay 9 billion Hong Kong dollars, directly less than 3.5 billion Hong Kong dollars.

Back then, buying at a high price pushed up liabilities, but now assets are depreciating and total assets are decreasing rapidly. From 2020 to 2022, Evergrande's total assets fell from 2.3 trillion yuan to 1.83 trillion yuan, a decrease of nearly 500 billion yuan.

If you have money to do it together, you can buy assets at a high price, pay large dividends, pay high-interest bonds, and "hollow out" the company in various ways. In the end, Xu Jiayin and the people behind him made a lot of money, but left an insolvent Evergrande.